OpenAI Funding Round Cut to $20 Billion at a $1.25 Trillion Value

OpenAI has cut the target for its latest funding round by $10 billion. The company is now seeking about $20 billion at a $1.25 trillion valuation, down from $30 billion at $1.4 trillion, the Financial Times reported on October 30, according to Reuters and Bloomberg. The cut came in the same week the Nasdaq 100 closed out its worst month since March 2025.

Some investors reduced their allocations, and the first close is now expected to bring in less than $20 billion, Reuters reported, citing the FT. The Wall Street Journal went further on October 31, reporting that OpenAI had raised less than half of its original $30 billion target. OpenAI declined to comment to Bloomberg and did not immediately respond to Reuters.

$20B

New target, down from $30B

$1.25T

Valuation, down from a $1.4T goal

$852B

Valuation after the March round

$122B

Raised in March 2026

What changed in the OpenAI funding round

Two numbers moved. The size of the round fell by a third, and the price fell by $150 billion, from the $1.4 trillion OpenAI had been aiming for last month to $1.25 trillion. Bloomberg had already reported the week before that OpenAI was seeking capital at $1.25 trillion, so the lower price was not new on Friday. The smaller check was.

Context matters here. Even at $1.25 trillion, the round would value OpenAI well above the $852 billion valuation it reached in March, when it raised $122 billion. Bloomberg reported the March raise; the $852 billion figure comes from Stocktwits. The company is not raising at a lower price than its last round. It is raising at a lower price than it wanted, and less money than it planned.

Investors faced a Friday deadline to commit, Reuters reported. The FT also said a retail offering at the $1.25 trillion valuation, aimed at wealthy individuals, is set to follow, according to Reuters.

Who is still investing

A consortium from the United Arab Emirates that includes state-backed MGX is expected to be the largest participant, according to Reuters and Bloomberg. As part of the deal, OpenAI would gain an option to lease newly developed computing capacity in the UAE, Reuters reported. Founders Fund, Coatue, Sequoia Capital and Andreessen Horowitz are also expected to take part, according to Reuters, and Bloomberg added SoftBank Group to the list.

The list of names is long. What shrank, according to the reports, is the size of the checks: some investors cut their allocations, which is why the first close is expected to land below $20 billion.

Why the AI selloff reached private markets

The cut came at the end of a rough week for public AI stocks. The Nasdaq Composite fell 2.9% on Friday and closed 7.8% below its October 6 high, Reuters reported. The Nasdaq 100 dropped 3.5% that day and ended October down 6.65%, its worst month since March 2025, according to Stocktwits. Alphabet, Intel and Amazon led the slide after results that set rising AI spending against slower growth, which we covered in AI Bubble Fears Return as Tech Stocks Lose $1 Trillion in a Day.

Private valuations usually lag public ones, but late-stage investors watch the same screens. When listed AI companies lose value quickly, the price a fund will pay for a private AI stake comes under the same pressure. Bloomberg also pointed to a second complication: rival Anthropic is preparing to go public next month at a valuation of at least $1.5 trillion. A listed alternative gives investors another way to own a frontier AI lab, and a public price to compare against.

OpenAI itself is pursuing a listing in 2027, Reuters has reported. How Anthropic trades after its debut is likely to shape what public investors would pay for OpenAI, and how much private investors are willing to pay before that.

What the AI Bubble Index says

The AI Bubble Index read 43.4 in the Neutral band on its latest reading, little changed from 43.6 a week earlier. Of its five components, capital flows reads highest at 64.9 and sentiment at 59.6, while valuation reads 32.9 and adoption 20.1. Private funding rounds are not a direct input, so the index does not register OpenAI's smaller raise by itself. The methodology page explains what each component measures, and the dashboard tracks them day by day.

Private funding is one part of the picture the index does not see directly. Our dot-com bubble timeline shows how financing conditions changed as the last tech boom turned, and our guide to AI investment risks covers why so much of this boom depends on private capital. For the spending side of the equation, see our analysis of AI capex and cash flow.